BILL NUMBER: SB 583 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 7, 1999
AMENDED IN ASSEMBLY JUNE 14, 1999
INTRODUCED BY Senator Baca
FEBRUARY 23, 1999
An act to amend Sections 20303, 20894, and 21754 of , and to
add Sections 20225.5 and 20815.5 to, the Government Code,
relating to public employees' retirement.
LEGISLATIVE COUNSEL'S DIGEST
SB 583, as amended, Baca. Public employees' retirement:
supplemental defined benefit plans Employees'
Retirement System .
The Public Employees' Retirement Law requires the assets and
liabilities arising out of contracts with school employers to be
merged.
This bill would authorize the creation of separate risk pools for
local and school miscellaneous, local safety, and school safety
members, as specified, and would authorize the assets and liabilities
of contracting agencies and school districts participating in the
same risk pool to be combined for purposes of setting employer
contribution rates.
The Public Employees' Retirement Law provides that a person
receiving service credit in another publicly funded retirement system
may not be a member of the Public Employees' Retirement System as to
that service and prohibits a person from receiving service credit
for the same service in 2 publicly funded retirement systems. That
law also provides, however, that participation in a deferred
compensation plan or money purchase pension plan and trust, as
specified, shall not be deemed membership in another publicly funded
retirement system or preclude concurrent participation and service
credit in the PERS plan and those specified other plans.
This bill would additionally provide that participation in a
supplemental defined benefit plan maintained by the employer that
meets specified criteria shall not be deemed membership in another
publicly funded retirement system or preclude concurrent
participation and service credit in the PERS defined benefit plan and
that plan if specified conditions exist.
Existing law provides that if a member's combined benefits under
the PERS plan and another benefit plan maintained by the employer
exceed limits specified in federal law, the benefits payable under
the PERS plan shall be reduced.
This bill would instead provide that if a member's combined
benefits under the PERS plan and other defined benefit plans
maintained by the employer exceed federal limits, the benefits
payable under the other defined benefit plan shall be reduced.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 20225.5 is added to the Government Code,
to read:
20225.5. (a) Notwithstanding Sections 20616, 20618, and 20815,
the board may create separate risk pools for local and school
miscellaneous, local safety, and school safety members. Should a
contracting agency or school district choose to participate in a risk
pool, the assets and liabilities with respect to the affected member
classification shall be combined with those of the pool.
(b) Within six months after the effective date of any new option
available to contracting agencies or school districts, the board
shall (1) notify all contracting agencies and school districts
participating in a risk pool created under subdivision (a) of the
availability and approximate cost of the new option, (2) include the
new option in at least one of the risk pools applicable to each
member category to which the new option may apply and previously
created under subdivision (a), and (3) notify the contracting
agencies and school districts of their options if they are
participating in a risk pool to which the new option is added and
choose not to offer the new option to their employees.
(c) This section shall not apply to any contracting agency or
school district nor to the employees of any contracting agency or
school district until the agency elects to be subject to this section
by amendment to its contract made in the manner prescribed for
approval of contracts or in the case of contract made after this
section takes effect, by express provision in the contract making the
contracting agency subject to this section.
SEC. 2. Section 20303 of the Government Code is amended to
read:
20303. (a) Persons who are members of any other retirement or
pension system supported wholly or in part by funds of the United
States government, any state government, or any political subdivision
thereof and who are receiving credit in the other system for service
are, as to that service, excluded from this system.
(b) (1) For the purpose of this section only, persons who are
receiving pensions, retirement allowances, or other payments, from
any source whatever, on account of service rendered to an employer
other than the state and while they were not in state service, are
not, because of that receipt, members of any other retirement or
pension system.
(2) For the purposes of this section only, persons who participate
in a deferred compensation plan established pursuant to Chapter 4
(commencing with Section 19993) of Part 2.6 of Division 5 of Title 2
or established pursuant to Article 1.1 (commencing with Section
53212) of Chapter 2 of Part 1 of Division 2 of Title 5, are not,
because of that participation, members of any other retirement or
pension system.
(3) For the purposes of this section only, persons who participate
in a money purchase pension plan and trust that meets the
requirements of Section 401(a) of Title 26 of the United States Code
are not, because of that participation, members of any other
retirement or pension system, so long as the contracting agency has
received a ruling from the Internal Revenue Service stating that the
money purchase pension plan and trust qualifies under Section 401(a)
and furnishes proof thereof upon request by the board.
(4) For the purposes of this section only, persons who participate
in a supplemental defined benefit plan maintained by their employer
that meets the requirements of Section 401(a) of Title 26 of the
United States Code are not, because of that participation, members of
another retirement or pension system, provided that all of the
following conditions exist:
(A) The defined benefit plan provided under this part has been
designated as the employer's primary plan for the person.
(B) The supplemental defined benefit plan has received a ruling
from the Internal Revenue Service stating that the plan qualifies
under Section 401(a) of Title 26 of the United States Code, and has
furnished proof thereof to the employer and, upon request, to the
board.
(C) The person's participation in the supplemental defined benefit
plan does not, in any way, interfere with the person's rights to
membership in the defined benefit plan, or any benefit provided,
under this part.
SEC. 2.
SEC. 3. Section 20815.5 is added to the Government Code, to read:
20815.5. Notwithstanding Sections 20618 and 20815, the assets and
liabilities of contracting agencies and school districts electing to
be subject to Section 20225.5 shall be combined for purposes of
setting employer contributions for public agencies participating in
the same risk pool.
SEC. 4. Section 20894 of the Government Code is amended to
read:
20894. (a) A person shall not receive credit for the same service
in two retirement systems supported wholly or in part by public
funds under any circumstance.
(b) Nothing in this section shall preclude concurrent
participation and credit for service in a public retirement system
and in a deferred compensation plan established pursuant to Chapter 4
(commencing with Section 19993) of Part 2.6 or pursuant to Article
1.1 (commencing with Section 53212) of Chapter 2 of Part 1 of
Division 2 of Title 5, a tax-deferred retirement plan that meets the
requirements of Section 40l(k) of Title 26 of the United States Code,
or a money purchase pension plan and trust that meets the
requirements of Section 401(a) of Title 26 of the United States Code.
(c) Nothing in this section shall preclude concurrent
participation and credit for service in the defined benefit plan
provided under this part and in a supplemental defined benefit plan
maintained by the employer that meets the requirements of Section 401
(a) of Title 26 of the United States Code, provided all of the
following conditions exist:
(1) The defined benefit plan provided under this part has been
designated as the employer's primary plan for the person.
(2) The supplemental defined benefit plan has received a ruling
from the Internal Revenue Service stating that the plan qualifies
under Section 401(a) of Title 26 of the United States Code, and has
furnished proof thereof to the employer and, upon request, to the
board.
(3) The person's participation in the supplemental defined benefit
plan does not, in any way, interfere with the person's rights to
membership in the defined benefit plan, or any benefit provided,
under this part.
SEC. 3.
SEC. 5. Section 21754 of the Government Code is amended to
read:
21754. In addition to the benefit limitations specified in this
part, if a member participates in other defined benefit plans
maintained by the employer, to the extent the aggregation of benefits
payable under those plans and pursuant to Part 3 (commencing with
Section 20000) are subject to and exceed the limits prescribed by
Section 415 of Title 26 of the United States Code, the benefits
payable pursuant to the other defined benefit plans maintained by the
employer shall be reduced, but not below zero, to the extent
necessary to satisfy Section 415, before adjustments to the benefits
provided under Part 3 are made. Nothing in this section shall limit
a member's entitlement to replacement benefits as provided by Section
21757.